Young people looking for health insurance have new options

After leaving college at the Art Institute of Pittsburgh last year to move to Los Angeles, 23-year-old Odin Gray debated for several monthswhether to buy a health insurance policy.

An avid bicyclist, he finally decided in December that it was time to buy coverage.

"I knew that if anything happened," Gray recalled, "I was going to be in serious trouble and that it could bankrupt me financially."

His decision, it turns out, was a smart one. In January — just one month after buying a policy — he took a spill on his bike while heading to work, he said. "I smashed my head on the pavement and got a traumatic brain injury."

Experts say Gray's experience highlights one of the biggest concerns young people should have about leaving school without the protection of a health plan. Young adults ages 19 to 29 visit the emergency room more than any other group younger than 75, mostly because of accidents.

Gray and millions of young men and women like him are a principal focus this year of the insurance industry, as well as state and federal health officials, as they prepare for the bulk of the federal Affordable Care Act to take effect in 2014. Next year, many young adults will face new requirements for having insurance and an increasingly large fine if they don't sign up.

There are already a number of health insurance options for college graduates to consider. And by year's end, the health reform law will bring new choices for everyone.

• Be true to your school. If you're covered by a college health plan now, check to see whether there is a grace period during which you'll remain covered after graduation. It varies by school and circumstance, but generally plans will extend through the summer.

And if you're continuing on for an advanced degree, consider sticking with the plan offered at school, says Tamika Butler, the California director of Washington, D.C.-based Young Invincibles (younginvincibles.org), a national organization that seeks to represent the interests of 18- to 34-year-olds.

• Ask at work. New grads fortunate enough to have landed a job should ask about health insurance at work. Be sure to get help from the company's benefits department if needed, Butler says. "Healthcare is a big decision, so don't be afraid to say, 'It's my first time and I have a few questions.'"

• Stick with Mom and Dad. Under the healthcare reform law, most young adults can now stay on their parents' insurance plan until the age of 26, even if they're married, financially independent or live in another state. It's a popular option that has helped more than 3 million young adults nationwide gain coverage, but it may not work if you don't live near your parents. Many health plans require you to use a network of healthcare providers within the geographic area in which the policy is issued.

• Buy your own policy. Young adults like Gray who don't have access to coverage through work or parents can buy a policy on the private health insurance market.

Starting next year, you won't have to worry about being denied because of any health problems. The Affordable Care Act will guarantee coverage to everyone who applies for a health insurance policy. However, cost may be a concern. Most young adults without health insurance cite its high cost as the main reason, Butler says.

You can search for and compare insurance options on the government's website at finder.healthcare.gov as well as through EHealthInsurance. To find a licensed insurance agent in your area, visit the National Assn. of Health Underwriters website at www.nahu.org. These sites are also good sources of information for newcomers with little understanding of health insurance.

• New options are coming. Starting Oct. 1, Californians can shop for a policy on the state's new health insurance marketplace, Covered California, at www.coveredca.com. A health plan purchased in the fall will take effect Jan. 1, 2014.

"For most young adults, that means greater insurance options at lower costs," says Sara Collins, vice president of affordable health insurance with the Commonwealth Fund, a New York City think tank.

Collins says 94% of young adults ages 19 to 29 nationwide will be eligible for tax credits that will substantially lower their costs.

In California, nearly 1.5 million young adults are estimated to qualify for a subsidy. Single adults earning up to $45,960 and families of four earning up to $94,200 are eligible for some kind of a break. Roughly 1.2 million people will be eligible for coverage through Medi-Cal.

These subsidies can be used only with policies purchased through state insurance exchanges such as Covered California.

Consumers Union, the nonprofit publisher of Consumer Reports, has just released a brochure explaining the new premium tax credits available under the law. You can find it at www.consumersunion.org/tax_credit_brochure.

• What will it cost you? It depends.

You can get an idea of how much insurance will cost you when you buy coverage through the state's program. There is a cost calculator available on the Covered California website at www.coveredca.com/calculating_the_cost.html. It requires just a few pieces of information, including your household income and the age of the family members you wish to cover.

Gray's bicycle accident left him with some hearing loss that he says may get better with time. But he is relieved that he had insurance that covered most of his bills.

"It's worth paying the extra dollars," Gray says of his health plan. "It fosters financial ruin to not have health insurance in this country."